Alastair Campbell is said to be considering his future as Tony Blair's director of communications after meeting the Prime Minister yesterday.
As the fall-out continued following the death of Dr David Kelly, Mr Campbell will use his summer break to think about his position. But he is likely to remain in his post until Lord Hutton completes his inquiry into death of the government scientist.
Mr Campbell, who has faced criticism over the Government's war of words with the BBC, has told friends he believes he has done nothing wrong, and is determined to ensure he is exonerated before leaving his post. "He is determined to clear his name,'' one friend said.
Ministers are under intense pressure to explain how Dr Kelly's name was released to the media as the possible source of a report by Andrew Gilligan claiming the Government had exaggerated the threat from Iraq.
Last night, Downing Street dismissed reports of Mr Campbell's departure as "wishful thinking". A spokesman criticised a report by the BBC's political editor Andrew Marr claiming that Mr Campbell would quit later this year. The Downing Street spokesman said: "This is a diversion from the main issue which is that the BBC broadcast false allegations on 29 May with no shred of evidence to support them.''
David Hill, a former Labour Party director of communications, is thought to be the frontrunner to replace Mr Campbell. But senior figures in No 10 are thought to be considering abolishing Mr Campbell's post.
Meanwhile, plans to publish Mr Gilligan's testimony were dropped by the Foreign Affairs Committee yesterday. It made the decision after it received a "private communication" from Gavyn Davies, the chairman of the BBC. The attempts by MPs and the BBC to cool the row came as Mr Blair returned to Britain after his world tour.
The Prime Minister is facing the prospect of giving evidence in public to the Hutton inquiry. An article in the current issue of The Spectator magazine argues that Downing Street's part in events was bigger than that initially claimed.
No 10 has said it was only "consulted" about the Kelly affair, but the magazine highlights reports in the press that suggest that Downing Street played "the decisive role in the leaking of the name".
It quotes an article by the political journalist Patrick Wintour of The Guardian, who has high-level contacts at Downing Street. In the article on 9 July, Mr Wintour wrote that No 10 was "confident it had tracked down the Gilligan source".
It hinted that Mr Campbell had decided to play an active part in how the matter was dealt with: "Mr Campbell could have let the matter lie and allowed the MoD to deal with the issue internally. But - in the view of Downing Street - over the weekend the BBC director general Greg Dyke had improperly bullied the BBC governors into backing Gilligan," Mr Wintour wrote. "Anyway, Mr Campbell is not a man to let a matter like this rest."
¿ Nearly two-thirds of voters believe that the Government that has lost control of events, according to a new poll. The survey reveals that the conflict over the Iraq dossier and the suicide of Dr Kelly have led to a loss of confidence in the Prime Minister's reputation for strong leadership. The poll, conducted by YouGov for The Daily Telegraph, also revealed that the Tories were three points ahead of Labour.Reuse content